8-KOther Events

Bank of New York Mellon Corp 8-K Report, Corporate Update (Dec 11, 2014)

Filed December 11, 2014For Securities:BKBK-PKBNYBNY-PK

Summary

This 8-K filing from The Bank of New York Mellon Corporation (BNY Mellon) reports a significant legal victory regarding its $312 million secured loan to Sentinel Management Group, Inc. (Sentinel), an asset manager that filed for bankruptcy in 2007. The United States District Court for the Northern District of Illinois entered a favorable decision concerning the status of this loan. As of September 30, 2014, BNY Mellon had classified this loan as fully collateralized and performing, with $28 million in accrued interest. The favorable court ruling is expected to have no negative impact on BNY Mellon's fourth quarter 2014 financial results, providing clarity and certainty regarding this material asset.

Key Highlights

  • 1BNY Mellon secured a favorable court decision on December 10, 2014, from the U.S. District Court for the Northern District of Illinois.
  • 2The decision pertains to a $312 million secured loan made to Sentinel Management Group, Inc. (Sentinel), an asset manager that declared bankruptcy in 2007.
  • 3As of September 30, 2014, the loan was fully collateralized and considered a performing asset by BNY Mellon.
  • 4BNY Mellon had accrued $28 million in interest on this reestablished loan as of September 30, 2014.
  • 5The favorable ruling is expected to result in no impact on BNY Mellon's fourth quarter 2014 earnings.
  • 6This filing provides significant positive news regarding a past significant financial exposure.

Frequently Asked Questions

The dispute centered on the status and recoverability of a $312 million secured loan that BNY Mellon had provided to Sentinel Management Group, an asset manager that filed for bankruptcy in 2007. The court's favorable decision confirms BNY Mellon's position regarding the collateral and performance of this loan.

BNY Mellon expects no negative impact on its fourth quarter 2014 financial results due to this favorable ruling. This implies that the loan will be resolved favorably, avoiding any write-downs or losses that could have affected earnings.

Yes, as of September 30, 2014, BNY Mellon reported that the $312 million loan was fully collateralized and classified as a performing loan, with $28 million in accrued interest.

Sentinel Management Group filed for bankruptcy in 2007.